Convenience Retail Asia Ltd revenue increased on 4.3% in 2015 and EBITDA Margin showed almost no change
15/03/2016 • About Convenience Retail Asia Ltd (
$831) • By InTwits
Convenience Retail Asia Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Convenience Retail Asia Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 50.9%.
- CAPEX is quite volatile: 111 in 2015, 3.1 in 2014, 7.3 in 2013, 7.0 in 2012, 26.7 in 2011
- The company has highly profitable business model: ROIC is at 20.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Convenience Retail Asia Ltd ($831) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,973 | 4,270 | 4,521 | 4,531 | 4,728 | 4.3% |
| Gross Profit | 1,383 | 1,469 | 1,580 | 1,567 | 1,604 | 2.3% |
| SG&A | | 278 | 310 | 301 | 319 | 5.9% |
| EBITDA | 270 | 318 | 231 | 240 | 230 | -4.2% |
| Net Income | 166 | 200 | 150 | 121 | 159 | 31.5% |
Balance Sheet
|
|---|
| Cash | 394 | 539 | 431 | 528 | 567 | 7.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 60 | 106 | 87 | 70 | 84 | 20.0% |
Ratios
|
|---|
| Revenue growth | 11.1% | 7.5% | 5.9% | 0.2% | 4.3% | |
| EBITDA growth | 19.4% | 17.6% | -27.4% | 4.0% | -4.2% | |
| Gross Margin | 34.8% | 34.4% | 34.9% | 34.6% | 33.9% | -0.7% |
| EBITDA Margin | 6.8% | 7.4% | 5.1% | 5.3% | 4.9% | -0.4% |
| Net Income Margin | 4.2% | 4.7% | 3.3% | 2.7% | 3.4% | 0.7% |
| SG&A, % of revenue | | 6.5% | 6.9% | 6.7% | 6.7% | 0.1% |
| CAPEX, % of revenue | 1.5% | 2.5% | 1.9% | 1.5% | 1.8% | 0.2% |
| ROIC | 22.9% | 25.9% | 18.4% | 22.8% | 20.2% | -2.7% |
| ROE | 18.6% | 20.5% | 17.0% | 15.6% | 19.5% | 3.9% |
| Net Debt/EBITDA | -1.5x | -1.7x | -1.9x | -2.2x | -2.5x | -0.3x |
Revenue and profitability
Convenience Retail Asia Ltd's Revenue increased on 4.3% in 2015. EBITDA Margin showed almost no change in 2015.
Gross Margin decreased slightly on 0.68 pp from 34.6% to 33.9% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased slightly on 0.70 pp from 2.7% to 3.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
Convenience Retail Asia Ltd's CAPEX/Revenue was 1.8% in 2015. CAPEX/Revenue decreased slightly on 0.70 pp from 2.5% in 2012 to 1.8% in 2015. For the last three years the average CAPEX/Revenue was 1.8%.
Return on investment
The company operates at high and attractive ROIC (20.16%) while ROE is a bit lower (19.55%). ROIC decreased on 2.7 pp from 22.8% to 20.2% in 2015. ROE increased on 3.9 pp from 15.6% to 19.5% in 2015.
Leverage (Debt)
The company has no debt. Cash increased on 7.4% in 2015.
Appendix 1: Peers in Retail
Below we provide Convenience Retail Asia Ltd benchmarking against other companies in Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Household Holdings Ltd ($692) | -87.0% | -32.8% | 5,357.9% | 76.2% | |
| Ming Fung Jewellery Group Ltd ($860) | | 3.3% | -14.9% | 54.3% | -70.8% |
| Merry Garden Holdings Ltd ($1237) | 53.9% | 37.1% | 12.8% | 47.6% | |
| Luk Fook Holdings International Ltd ($590) | | 47.2% | 12.6% | 43.3% | -17.1% |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (111 companies) | 23.9% | 10.5% | 6.1% | 3.1% | -1.0% |
|---|
| Convenience Retail Asia Ltd ($831) | | 7.5% | 5.9% | 0.2% | 4.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.5% | 91.1% | 99.4% | 99.5% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | 96.7% |
| Vongroup Ltd ($318) | | | | 95.1% | 99.1% |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | |
| |
|---|
| Median (100 companies) | 40.4% | 37.8% | 39.5% | 37.6% | 46.0% |
|---|
| Convenience Retail Asia Ltd ($831) | 34.8% | 34.4% | 34.9% | 34.6% | 33.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Maoye International Holdings Ltd ($848) | 45.5% | 47.4% | 46.3% | 73.2% | 39.6% |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | 43.4% |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (110 companies) | 13.3% | 10.3% | 7.3% | 8.8% | 8.3% |
|---|
| Convenience Retail Asia Ltd ($831) | 6.8% | 7.4% | 5.1% | 5.3% | 4.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intime Retail Group Co Ltd ($1833) | 58.4% | 28.3% | 55.4% | 37.0% | |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | 24.9% |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | 17.7% |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | 10.6% |
| |
|---|
| Median (111 companies) | 3.9% | 4.0% | 3.6% | 3.6% | 2.7% |
|---|
| Convenience Retail Asia Ltd ($831) | 1.5% | 2.5% | 1.9% | 1.5% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 48.1% | 50.7% | -4.6% | 81.3% | 71.8% |
| Starbucks Corp ($4337) | 36.4% | 36.4% | -6.0% | 52.8% | 51.4% |
| Sa Sa International Holdings Ltd ($178) | 45.7% | 53.5% | 52.7% | 49.0% | 39.8% |
| Coach Inc ($6388) | 82.0% | 82.3% | 68.7% | 45.0% | 20.8% |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| |
|---|
| Median (111 companies) | 16.6% | 12.0% | 8.2% | 8.4% | 6.2% |
|---|
| Convenience Retail Asia Ltd ($831) | 22.9% | 25.9% | 18.4% | 22.8% | 20.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | |
| Zhongsheng Group Holdings Ltd ($881) | 2.2x | 4.6x | 4.5x | 5.3x | |
| NewOcean Energy Holdings Ltd ($342) | 35.2x | 6.2x | 6.1x | 5.3x | |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | 7.3x |
| |
|---|
| Median (86 companies) | -0.8x | -0.5x | -0.8x | -0.2x | -0.5x |
|---|
| Convenience Retail Asia Ltd ($831) | -1.5x | -1.7x | -1.9x | -2.2x | -2.5x |
